"The UK economy and the labour market have recently been going through a remarkable period of stable, ongoing growth. This is the longest period of unbroken growth since current GDP figures began in 1955 and generally the economy has been through its most stable period since the 1960s. Nevertheless, the business cycle remains, and leading indicators of change in the economy and the labour market remain useful.This article examines labour market data over the past 30 years and investigates what measures provide the earliest and most reliable evidence of turning points. This is largely based on past historical performance within the labour market, and suggests that, while one needs to take on board all available data to get a rounded picture of the labour market, the most reliable leading indicator of turning points is the monthly change in claimant count. Workforce jobs is less useful but there is a reasonable relationship between workforce jobs and the state of the economy.The article considers the accuracy of each of the possible indicators, particularly how prone to revision each is. Other factors considered are timeliness and how well an indicator performs in identifying turning points in GDP. The Labour Force Survey (LFS) appears to fall somewhere between workforce jobs and the claimant count, both in terms of timeliness and accuracy. The LFS may become a leading indicator, but is currently more difficult to use as it only went quarterly in 1992, after the last UK turning point."

Support: Paper